State-run Bank of India on May 23 reported a 142.31 percent rise in standalone profit after tax (PAT) at Rs 606 crore in the quarter ended March 2022 on higher net interest income (NII) and improvement in asset quality. This compares with a PAT of Rs 250 crore in the same period of the preceding fiscal.

For the full year 2021-22, the lender reported a 57.60 percent jump in net profit at Rs 3,405 crore from Rs 2,160 crore in FY21. Speaking to reporters, the bank's Managing Director and CEO A.K. Das said: "Asset quality further improved with reduction in gross NPAs both amount wise and percentage wise." He said the bank's thrust was on advances growth rather than deposit growth. It also laid emphasis on outreach campaigns for business growth and building bonds with the customers in the previous fiscal.

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Net interest income (NII) increased by 35.77 percent to Rs 3,986 crore in Q4 FY22, from Rs 2,936 crore in the same period of the previous fiscal. Net interest margin (NIM) improved to 2.58 percent from 2.01 percent.

Gross non-performing assets (GNPAs) declined by 19.33 percent to Rs 45,605 crore in March 2022 from Rs 56,535 crore in March 2021. GNPA ratio declined to 9.98 percent from 13.77 percent. Net NPA ratio stood at 2.34 percent against 3.35 percent.

Das said the gross NPA is expected to be lower than 8 percent by March 2023. He further said the bank's exposure to Future Group is about Rs 1,045 crore and it has made 100 percent provisions for the account. For Srei Group, where its exposure is Rs 963 crore, a 50 percent provisioning has been made.

Slippage ratio for the fourth quarter was restricted to 0.44 percent and for the entire year it was brought down to 2.15 percent from 2.41 percent, Das said. Credit cost improved from 3.36 percent in Q4 FY21 to 1.10 percent in Q4 FY22.

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Fresh slippages stood at Rs 1,502 crore during the January-March quarter. The cash recovery for the quarter was Rs 1,329 crore and at Rs 6,707 crore for FY22. The lender is targeting Rs 12,000 crore of recovery during FY23, he said.

Domestic advances grew by 8.73 percent to Rs 3,93,991 crore and overseas advances increased by 31.09 percent to Rs 63,023 crore. RAM (retail, agriculture and MSME) advances increased by 15.70 percent to Rs 2,16,567 crore, constituting 54.97 percent of the advances.

The bank has projected a credit growth of around 10-12 percent in the current financial year. Das said corporate credit growth in FY22 was muted.

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For the entire last year, the lender sanctioned more than Rs 70,000 crore but the availment was less at around Rs 29,000 crore. Even the availment of overdraft (OD) limits was around 68-69 percent. "We believe that this time, apart from MSME, mid-cap segments, corporate segment will receive added focus, which will be helped by the fact that the government has come out with lots of initiatives such as the Rs 7.5 lakh crore capex plan, which will have multiplier effects and create new demand,” he said.

"We have got adequate capital also to fund the corporate sector growth. I think 10-12 percent (credit growth) is the bare minimum that we could be expecting this year," Das said. As on March 31, 2022, the bank's capital adequacy ratio (CRAR) stood at 17.04 percent against 14.93 percent in March 2021.

On capital raising plans, Das said the lender may raise Rs 2,500 crore this year. "The government is having 81 percent shareholding in the bank which we are planning to bring down to 75 percent. We have taken in-principle approval from the board for raising about Rs 2,500 crore in this financial year," Das said, adding that the fundraise will be through qualified institutional placement (QIP) or follow-on public offer (FPO) route.

The bank's scrip closed at Rs 47.15 apiece, up 1.51 percent on BSE. The lender has recommended a dividend of Rs 2 (or 20 percent) per equity share for FY2021-22.